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From idea to cooperative – in just 7 steps

What does the process of turning an idea into an up-and-running cooperative involve? Ronald Korpershoek, Rabobank’s expert in the development of new cooperatives, walks us through the steps.

The idea is born. ‘This is the “raw”, creative part of the process. It is when people start brainstorming and throwing ideas around, and thinking about what role they might be able to play,’ Korpershoek says. ‘For example, could we use solar panels to supply some of the electricity in the neighbourhood? Or: do we have the resources to take the village’s healthcare into our own hands?’

The leaders present themselves. ‘Once you have your idea, you need people who are willing to act as founders and leaders and who are able to inspire others. If those people fail to emerge, either in your social circle or your professional network, your idea is likely to fall flat. Any initiative needs to start from the bottom up,’ Korpershoek explains.

Setting goals and preparing a business case. The leaders need to translate the idea into specific goals and demonstrate that it is financially viable. For example, they need to provide a rough estimate of the income and expenditure associated with the wind turbine, or give some idea of the financial contribution members need to make to a feasibility study, if necessary.

Developing the plan into a concrete, feasible and replicable project. Korpershoek: ‘It is all well and good to fantasise about installing solar panels in 1,000 homes in a single district, but that is going to be a very long and complicated process. You run the risk of volunteers losing interest, and once people become disappointed and start opting out, it is very hard to get them motivated again. It may be a better idea to start by installing solar panels in a school, and then, say, at a retirement complex, before moving on to a more ambitious scale.’

Establishing the cooperative. ‘Only once you have completed these stages can you start thinking about the precise form of the entity you want to establish, the actual business enterprise,’ Korpershoek says. Cooperatives are by their very nature democratic and give control to the individual members. This means the founders need to decide what the management structure of the cooperative is going to look like and how the board members are to be appointed. They need to look at how the members will be able to exert influence and control in a democratic way, and make decisions about members’ individual liability.

The first project. Once the cooperative enterprise has been formally established, the time has come to get down to business. Korpershoek: ‘It is a good idea to set yourself an initial task with a clear start and finish line. And then you have got to go ahead and take the plunge. It could be anything from doing preliminary research into the wind turbine to be used to purchasing and installing the first batch of solar panels, or establishing an organisation to identify local healthcare needs. You may also have assets in the balance sheet of the cooperative, and you need a team and financial resources to run the project. Of course, this stage is also very much about consulting with the members of the cooperative to settle on a proposal everyone can get on board with.’

Operation – running the cooperative. Once the first project has been completed, the cooperative needs to make sure that everything is running smoothly and that the democratic process in the cooperative is working properly. A joint decision can then be made to branch out into other business areas and consolidate the cooperative’s objectives. Not all cooperatives need to be active and dynamic all the time. Once the fibre-optic network has been installed, for example, you just need to work out a procedure for when members move house, and distribute the profits. Healthcare and wind farm cooperatives, on the other hand, deal with constant change, and, since they are also more high-profile, they are going to be more dynamic by their very nature.